Latest GDP figures confirm UK economy is in recession

Gross domestic product (GDP) contracted by 0.3 per cent in the first quarter of this year, confirming that Britain is in recession, latest official figures show.

The figure has remained unrevised from the previous estimate, the Office for National Statistics (ONS) said.

Output from production industries fell by 0.5 per cent, within which manufacturing output fell by 0.3 per cent, the report indicates.

However, this was an improvement from the fourth quarter of 2011, when production output slipped by 1.4 per cent and manufacturing output decreased by 1.1 per cent.

But while service industries’ output rose by 0.2 per cent between January and March, up from a 0.2 per cent decline the previous quarter, output from the construction industry slumped 4.9 per cent during the first three months of this year after flat-lining in Q4 last year.

Dr Howard Archer, chief European and UK economist at IHS Global Insight, said a significant revision of the GDP data had been unlikely and the economy is clearly struggling.

“Hopes have waned that further contraction can be avoided in the second quarter, especially as the economy is handicapped by the extra day’s public holiday that resulted from the Queen’s Diamond Jubilee celebrations,” he said.

However, latest figures from the CBI have revealed that the Diamond Jubilee helped retail sales rise at their fastest pace for 18 months.

A balance of 42 per cent of retailers reported higher year-on-year sales volumes for the first half of June, the highest level since December 2010.

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